The Real Reason You're Not Closing

The Real Reason You're Not Closing:

from Inc.com by Mark Suster


 
You've done everything right. You know what you're selling--and why your customer should buy it--but you just can't close the sale. Perhaps the missing ingredient is why a customer should buy...now.
Editor's note: This post originally appeared on Mark Suster's blog Both Sides of the Table.
Every sales organization with more than a handful of reps or that is across multiple offices or time zones would benefit from having a sales methodology. There are many out there and many books have been written on the topic.
I’ve been writing a series on a simple methodology that we used at my first enterprise software company.
It was useful because I was new to sales and as the CEO it gave me some comfort to feel more informed about how our leads where going and to know the likelihood of our hitting our quarterly goals.
We called our methodology PUCCKA (you can click on the link for a full explanation).
The first post covered the topic of “P” or pain. Simply, this is identifying a customer need that has economic value to them if they can solve it. This solves the customer question, “Why Buy Anything?”
The second post was about the “U” or Unique Selling Proposition, which in industry terms is often called a USP. If a customer knows they have a problem they need to select a vendor who best solves that problem (or they can build in-house tools).
The USP solves the, “Why Buy Me?” question.
But the number one reason sales stall when customers see the value in what you do is because they often don’t have a reason to buy NOW.
That is where a “compelling event” comes into play.
If you’ve done a good job in the sales process you’ve already written out a needs document in which your wrote out what you believe the customer problems are with specific examples.
In a perfect world you’d have a customer champion who would go through and validate your list.
A friend of mine who was a former sales manager used to call this, “Identify the need then get the need agreed.” That always stuck with me.
If you can’t get somebody motivated by proving things economically they often lack the will to follow through or the political support they need to get budget. People only act when the have quantifiable pain in which not acting is worse. We used to call it a “burning platform” as in when your platform is burning you’re forced to take action.
The next logical piece of work is therefore to help your prospect quantify the problem so they can attribute economic value to your solution and help you complete your sale.
It’s true that some solutions are really hard to quantify and the most obvious example people point to is email. “You can’t quantify the value of email yet everybody needs it!”
Maybe they don’t? I know many modern software companies that are abandoning email in favor of more open systems as a way of reducing bureaucracy. I’ll bet that could be quantified.
Do the best you can to measure the success of your product in quantifiable terms. In an early-stage business where your product is less developed the business case might be higher level.
Or simply if you’re earlier in the sales cycle and you don’t want to get bogged down in too much detail until you have customer buy-in to your high-level value statement.
Often the business case is made in an ROI format - a high-level spreadsheet that outlines the return on investment. As your company grows the number of sales reps you have it is useful to build “ROI calculators” for them which are nothing more than spreadsheet templates where they can enter in variables and the spreadsheet will make a case for your product.
The easiest thing for you to quantify are the hard costs associated with your product.
For example, if by using your analytics product you believe customers will convert 8% higher prospects to sales then you’ll make that case. Preferably you’d have a customer testimonial where the customer reference will be able to talk through their economic benefits.
But many technology products have huge hidden benefits that if not properly laid out in a business case won’t be readily acknowledged by the customer.
For example, if you offer a product that a customer believes he or she can simply build themselves they often won’t factor in the development costs of building the product and even more importantly the maintenance costs of keeping the product up to date.
This is where the rubber hits the road because the most expensive resources for many companies are its people.
This part of the ROI analysis is often called the “Total Cost of Ownership” or TCO. TCO often swings deals widely when you can persuade customers to understand their true costs of not working with you.
The question I get most often is how detailed to make the business case. That as I said is a function of both the stage of your company and where in the sales process you are.
You probably don’t want to overwhelm a new relationship with an 8-tab spreadsheet after your first meeting but in a multi-million dollar sale you’ll need it.
Once you’ve calculated the ROI I often recommend sitting down with your prospect to walk them through it. This is effective for a few reasons.
First, it gives you a reason to meet with them again and let’s face it - out of sight, out of mind! Second, it gives you a chance to have another debate about the pain points and also to start to leave the TCO thought in their mind.
I recommend telling your prospect, “Look, this is my first pass through the business case so I’ve obviously had to make some assumptions. I’d love to see whether we could possibly work on this together so I could refine some of these numbers and make sure they reflect your point of view, too.”
Trust me when I tell you that buyers seldom do the quant work on their own volition and therefore eager buyers often lose the battle for budget to buy your product.
It’s your job to make their job easier to buy you.
By the way, I recommend the EXACT same process when a company is interested in acquiring your company. Acquiring companies seldom do the detailed analysis of the benefits of buying your company. Doing the heavy-lifting for them will help the champion who wants to buy you persuade the remaining powers-that-be.
Summary:
If you’ve documented their pain in economic terms, if your product uniquely solves this pain and if you build a compelling business case as to why implementing your product will make money, lower costs or reduce risks - you’re well on your way toward a new customer.
But you’re very unlikely to land a new customer without a champion who helps push through your sale.
And not all people who are nice to you at the prospect is a “champion.”
In order to be a champion they must have both “influence” and “authority.” And they have to want to buy your product.
We’ll cover that in the next post.